The Trump administration should revisit an old, results-based approach to contracting currently prevalent in the private sector — share-in-savings, also known as gain share.
Unlike other types of contracts that commit the government to funding a project upfront, a share-in-savings contract requires the government to make only a minimal, upfront investment to begin a project, paying the contractor only when agreed-upon milestones or expected results are realized.
Share-in-savings contracts begin with specific agreed-upon measures, measurement methods, targets, timing, and rewards earned from successful results. The contractor is paid if it meets or exceeds the agreed-upon targets in the specified time. Further, if savings against the established cost baseline are generated, both the government and the contractor share in the savings. This incentivizes the contractor to save the government money, and helps ensure that the government does not pay for work done poorly or not at all.
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